Another Day In REIT Paradise: Cash Is King Celebrates Its 1-Year Anniversary Today

Summary

• Most REITs may have been less than loved last year, and they continued under-pacing other stocks’ gains into 2021.
• But that just means now is an especially opportune time to take advantage of their true value potential.
• We launched the Cash Is King portfolio one year ago today.
• Shares have returned 66.35% in that timespan – over TRIPLE the performance of the Vanguard Real Estate Index Fund ETF Shares.

Quote for Today:

“My path was simple: Follow your passion. Pour in your heart and soul. Settle for nothing less than excellence. And with enough hard work and faith in yourself, you can realize your dream.” – Robert Mondavi

(Source)

Raymond Thomas Dalio, more commonly known as Ray Dalio, is a hedge fund manager you may have heard of a time or two.

That’s because the man’s not just any hedge fund manager. He founded Bridgewater Associates, which manages about $140 billion in assets – making it the world’s biggest hedge fund.

According to Forbes, he began investing when he was just 12 years old and caddying for Long Island golfers, who gave him tips along the way. And he launched Bridgewater, not from a swanky office in a high rise, but in his two-bedroom NYC apartment.

This self-made man ranked #29 on Forbes’ wealthiest list last year, with a net worth of $20.3 billion.

Not too shabby, right?

The man is exceptionally intelligent, to say the least. And sophisticated too, running in all the right circles and welcomed into elite intellectual spheres everywhere. Yet when the topic of bonds came up, he went for blue-collar blunt:

“The economics of investing in bonds (and most financial assets) has become stupid… Rather than get paid less than inflation, why not instead buy stuff – any stuff – that will equal inflation or better?”

In which case, may I steer your attention over to real estate investment trusts?

Industry advocate Nareit reported yesterday that this special brand of stocks is “showing a good continuing recovery.” The sector isn’t completely there, it acknowledges, “but a recovery from the worst part of the pandemic a year ago” is underway nonetheless.

It has been since fourth-quarter 2020.

“According to [its] T-Tracker, funds from operations (FFO) of all equity REITs gained 11.3% in the fourth quarter from the third quarter, which itself was 10.3% higher than the second quarter. The recovery is not uniform, [Nareit senior economic Calvin] Schnure pointed out. Earnings for sectors at the front line of the shutdown, such as lodging and retail, continue to be quite weak. Other sectors have benefitted, namely those that support the digital economy, as well as industrial.”

(If you read my book, The Intelligent REIT Investor, due out in mere months, you’ll see how I group tech stocks with industrials… and exactly why.)

Again, that was commentary concerning Q4 data. But it also pointed out in a separate article that the FTSE Nareit All Equity REITs Index posted a 5.5% total return last week compared to the broader equity market’s 2.9%.

Both are higher than inflation, but one is obviously more superior. So which should you be loading up on?

Most REITs may have been less than loved last year, and they continued under-pacing other stocks’ gains into 2021. But that just means now is an especially opportune time to take advantage of their true value potential as people start recognizing that commercial real estate is far from dead after all.

The World According to Commercial Real Estate

Here’s another piece of interesting news…

Yesterday, five of the top-10 performers just so happened to be in the lodging REIT sector:

(The Daily REITBeat)

Intriguing, right? So is today’s Daily REITBeat:

• National Healthcare Investors (NHI) says it’s collected 86.3% of contractual rent for the month of March so far and 93.6% of its first-quarter rent owed.
• Global Medial (GMRE) commenced an underwritten public offering of 7.5 million common shares, which it will put toward paying down outstanding debts, funding acquisitions, and promoting general corporate purposes.

We plan to interview GMRE’s CEO tomorrow at iREIT on Alpha. And don’t forget that we have similar calls lined up with Iron Mountain (IRM), Vici Properties (VICI), UMH Properties (UMH), and Digital Realty (DLR) over the next several days.

I’m also going to take the opportunity to point out my weekend blog post, where I wrote how the Durable Income Portfolio:

“… has returned an average of 25% annually since we commenced the strategy in 2013.”

Considering how conservative-minded that collection is, I’m more than pleased with its performance.

Meanwhile, the Small-Cap REIT Portfolio:

“… has returned 43% per year (since inception in 2016) and is simply crushing it.”

But wait! There’s most definitely more where that came from, which is iREIT on Alpha.

It’s important for us to provide our members with not only the best research, but also full transparency about how our portfolios are really performing. We adhere to the saying, “Actions speak louder than words,” which is why we’re trumpeting the following results…

We launched the Cash Is King portfolio one year ago today. And, as you can see below, the performance has been incredible.

Shares have returned 66.35% in that timespan – over TRIPLE the performance of the Vanguard Real Estate Index Fund ETF Shares (VNQ).

(Sharesight)

Isn’t that kind of growth worth looking into? Especially free of charge for a solid two weeks…?

The #1 Site for Reliable REIT Income

When you join iREIT on Alpha, you get instant access to those profitable portfolios along with insightful articles and our iQ scoring model, where the Q stands for Quality.

This extremely powerful system lets data determine the best REITs to own based on their most basic and essential fundamentals.

Members have full access to this sophisticated screening tool whenever they want… as well as deep-dive details about equity REITs, mREITs, preferreds, BDCs, MLPs, ETFs, and, more.

Join this in-the-know community with a two-week FREE TRIAL that includes my new book as an added incentive to stick around.

I truly think becoming an iREIT on Alpha member will be worth your while considering everything you receive. It’s a long list that involves access to the dozens of C-suite interviews I’m constantly scheduling on my Ground Up podcast.

They’re designed to give you the kind of insider information that puts people ahead of the game. Just think about all the profitable possibilities when you’re not in the middle of the rat race anymore…

Author's note: Brad Thomas is a Wall Street writer, which means he's not always right with his predictions or recommendations. Since that also applies to his grammar, please excuse any typos you may find. Also, this article is free: written and distributed only to assist in research while providing a forum for second-level thinking.